Magyar Bancorp reported net income of $279,000, or $0.05 per diluted share, in the first quarter of 2010, ending March 31. Magyar Bancorp earned $409,000, or $0.07 per diluted share, in the first quarter of 2009.

The company blamed an increase in non-interest expenses for the year-over-year decline in net income. Magyar Bancorp saw an improvement in asset quality in the quarter relative to last year, and expressed optimism that the trend would continue in 2010 as the economy improves.

John Fitzgerald, the CEO of Magyar Bancorp, said, “Our second quarter results show continued improvement in the Company’s operations, including further expansion of our net interest margin and a reduction in our level of non-accrual loans…we saw a significant decrease in our construction loan portfolio during the quarter, and we expect this trend to continue throughout the second half of our fiscal year as economic conditions continue to improve.”

Magyar Bancorp reported a decline in non-performing loans, from $33.9 million at September 30, 2009, to $30.2 million at the end of the first quarter of 2010.

Magyar Bancorp is a bank holding company that owns Magyar Bank, a community bank headquartered in New Jersey. The bank has five branches in New Jersey and was founded in 1922.

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